Morningside nursing home, a not-for profit corporation, is estimating its corporate cost of capital. Its tax-exempt debt

Question:

Morningside nursing home, a not-for profit corporation, is estimating its corporate cost of capital. Its tax-exempt debt currently requires an interest rate of 6.2percent and its target call for 60 percent debt financing and 40 percent equity(fund capital) financing The estimate for selected investor-owned health care companies are given below
ABC..............15.0%
BCD.................16.4
CDE.................17.4
DEF.................18.8
a. What is the best estimate for Morningside's What is the firm's corporate cost of capital?
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